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08/01/2013 09:00 AM

Arizona Mulls Solar 'Tax'

SustainableBusiness.com News

The future of solar net metering in Arizona is under attack, with the state's largest utility Arizona Public Service (APS) proposing changes that undermine cost benefits for residential solar installations.

Under a plan submitted in July with the state's public utility commission, APS proposes two options for future residential solar customers – both of which will reduce potential financial returns homeowners would receive on their investment.

One alternative would model net-metering contracts much the same as today but require residential customers to pay what APS calls a "convenience fee" - a monthly charge for sending power to the grid. The other option would give homeowners a small ongoing bill reduction, based on market rates APS pays to other power generators.

Customers who already have a rooftop solar system as well as those who have already applied to connect by mid-October, would be given a "20-year grace period" before being subject to the new policy.

“As more customers install solar on their homes, it becomes even more important that everyone who uses the grid shares in the cost of keeping it operating reliably for the future,” says Don Brandt, APS chairman and CEO.

Solar advocates consider the APS proposal a "tax" on solar - the most direct attack yet on net metering, a key policy behind solar's expansion supported in 43 states. When more energy is created than a home or building needs, the meter turns backward, sending power back to the grid, which the utility pays for.

But after working well for many years, net metering is under attack by utilities, who increasingly see their business model threatened by distributed energy, and by conservative groups like ALEC, which will do anything to keep fossil fuels as the dominant fuel.

Things have gotten so bad that top solar installers such as Solar City, Sungevity and Sunrun recently formed the Alliance for Solar Choice to protect net metering and other state policies supportive of solar.

In a conference call before the Arizona plan was submitted, APS executives estimated that the average net-metering return is $0.15-$0.16 per kilowatt-hour (kWh), saving the average residential customer about 70% off their bill, reports GreentechMedia. The first option proposed by APS would reduce the customer's return to $0.06-$0.10 per kWh. The second would reduce a system owner's savings by about 50%.

The fate of the proposal is anyone's guess, but four members of the Arizona commission are closely allied with ALEC.

The Solar Energy Industries Association (SEIA) has voiced its concern over the APS recommendations, but is still hoping for a solution that "preserves full retail credit net metering while achieving ratepayer fairness," says Carrie Cullen Hitt, senior vice president of state affairs for SEIA.

“Solar energy offers tremendous benefits to all Arizona electricity customers, including those who aren’t yet solar users," says Hitt. "Clean solar power reduces air pollution, cuts distribution and transmission costs incurred by utilities, and creates jobs and economic growth opportunities. In 2012 alone, $590 million was invested in Arizona to install solar on homes and businesses.

“Arizona has just begun to scratch the surface of its solar potential. It’s essential that we keep smart policies like net metering in place so that Arizona can continue to benefit from its abundant solar resources, potentially spurring thousands of distributed generation and large-scale solar energy projects in the years ahead."

The US just passed the threshold to 10 GW of solar, powering about 2.4 million homes. Much of the recent growth is related to residential installations and the success of solar leasing and net metering programs.

I purchased a solar panel array for my home three years ago. There was a significant up-front cost but also long-term benefits. Good investment and very good for the environment. APS each year has paid me about $0.06 for each kWh my panels send to the grid. A very recent communicarion from APS says that, beginning July 1st 2013, APS will pay less than $0.03 per kWh sent to the grid... Why do I keep reading here and elsewhere that APS claims to be paying homeowners like myself $0.15 or more per kWh?

I, too, have a solar array on my home, about 4 kW. This change would be like a solar tax. I already pay all of the delivery fees, just like any other customer, so I'm already paying to be connected to the grid, and I continue to pay them no matter how much electricity I send to the grid. as it stands now, I use most of the electricity I generate and my electrical bills are still over $300 during the summer months.

Net metering allows a homeowner to "bank" excess generated electricity, kWh for kWh, on the local substation "grid", exchanging very expensive, very valuable, "peak demand" electricity for less valuable "off peak" electricity consumed by the homeowner at night.
Under the current Arizona EPR-6 rate, off-peak electrcity use is credited first with any excess solar generation, then any on-peak electricity use is credited when that is exhausted.
If a solar generating homeowner happens to generate more electricity than they consume (on average) over a period of one year, APS then pays *less* than $0.06 (six cents) for each kWh delivered.
Excess electricity generated by the solar system homeowner is consumed entirely within the local substation grid by nearby neighbors and adjacent businesses, up to the first substation voltage regulator, and does not need any long transmission lines, allowing the local utiltity to re-sell this energy at "on-peak" retail rates without any additional costs.

FROM THE CONSUMER’S STANDPOINT
• Electric utilities are becoming more intrusive into the CONSUMER’S homes and businesses
• Electric utilities are demanding Consumer life style and business changes with their Electric Peak Demand and Demand Response initiatives
The Electric Peak Demand Reduction Dilemma
The various States’ current approach to Electric Peak Demand Reduction, WILL ONLY INCREASE TOTAL PRIMARY ENERGY CONSUMPTION.
In the HOTTEST MONTHS (May - October), during the HOTTEST PART OF THE DAY (11:00 AM to 6:00 PM), the electric utility’s demand reduction plan will ONLY "SHIFT" their electric peak demand crisis.
All this Electric Peak demand SHIFTING just to satisfy the electric industry's disheveled electricity system. This SHIFTING DOES NOT HELP THE CONSUMER.
The electric companies have not stopped advocating to consumers not to buy more plug-in appliances; X-boxes, plasma TV's, computers, chargers, electric fireplaces, more electric plug-in appliances, etc., or to not install air conditioning.
If the various States’: Utility Commissions, Energy Offices, Consumer Advocate Offices and Electric Utilities want to really advocate for Energy Conservation, Energy Resource Optimization, Lower Emissions, Water Conservation and National Security on behalf their consumers and the Nation's Primary Energy Resources, they would advocate a more sensible approach to our nation's energy and water usage.
THE ELECTRIC TRANSMISSION AND DISTRIBUTION SYSTEMS ARE GUARANTEED TO GO DOWN DUE to WEATHER, REPAIRS, AND NATIONAL SECURITY PROBLEMS.
Electric OUTAGES WILL continue to HAPPEN, further impacting the CONSUMER.
Electric SMART METERS will allow the electric utility to TURN OFF a CONSUMER'S house or business electric appliances, when ever the electric utility wants to, whether or not the reason is in the CONSUMER'S BEST INTEREST.
Where is the "VALUE PROPOSITION" for the CONSUMERS by Utilizing More Electricity?
Billions have been spent and Billions more will be spend to shore up an electric system, yet the CONSUMER will have his BUSINESS and HOME lifestyles DRAMATICALLY CHANGED. All in the name of energy conservation for Electric Peak demand reduction and electric demand response problems.
THERE ARE REASONABLE AND RELIABLE ENERGY SOLUTIONS THAN WHAT THE ELECTRIC INDUSTRY IS PROPOSING THAT CAN BENEFIT THE CONSUMER AND NOT HAMPER THEIR HOME AND BUSINESS LIFESTYLES
REASONABLE CONSUMER ENERGY SOLUTIONS ARE READILY AVAILABLE TODAY
THE FOLLOWING ARE JUST A FEW ENERGY SOLUTIONS FROM THE CONSUMER'S STANDPOINT NOT THE UTILITY’S!
Mandate the use of the most Primary Energy efficient energy source for heating, water heating, cooking, clothes drying and solar water heating back up. Natural gas is the most economical, most nationally abundant and best Primary Energy provider in all new residential and commercial applications.
Mandate the most Primary Energy efficient energy source where the waste heat can be utilized. For commercial, industrial and some high density residential applications, natural gas combined heat and power (CHP) in all new applications would provide energy efficiency as high as 90%.
Allow and promote independent sub-metering and billing options to the property owners whereby the property owners can bill their various gas, electric, water and other utilities at their current billing rate, thereby making no added profit on the energy usage but forcing conservation through separate unit billings.
Providing master metered electric, gas and water meters to a structure and then sub-metering and billing in commercial, high rise and multi-family applications will produce significant energy conservation (30% achievable), reduce primary energy use, reduce Electric Peak demand and allow for more energy efficient central plants rather than individual water heating, heating and air conditionings systems.
Primary Energy Conservation & Electric Demand Reduction Programs:
• SHOULD NOT PENTALIZE UTILITIES or CONSUMERS
• ALLOW THE CONSUMER FREEDOM OF ENERGY CHOICE
• REDUCE PRIMARY ENERGY USE
• REDUCE OVERALL POWER PRODUCTION EMISSIONS
• PROVIDE MORE SECURE ENERGY RESOURCES
• IMPROVE OVERALL ENERGY RESOURCE OPTIMIZATION
• REDUCE OVERALL CONSUMER ENERGY COSTS
• INCREASE NATION'S OVER ALL ENERGY SYSTEM SECURITY
• REDUCE THE AMOUNT OF WATER USE IN POWER GENERATION
• RESOURCE OPTIMIZATION: is the more efficient and effective use of our Nations natural resources: natural gas, coal, oil and water. Electricity is not a natural resource.
• ENERGY CONSERVATION: should be a “one time measure” that eliminates overall energy use. Utilizing natural gas in all new construction applications, where it is most Primary Energy Efficient “is” Energy Conservation.
• ELECTRIC PEAK DEMAND RESPONSE: should NOT be the "SHIFTING" of Electric Peak, but the "PERMANENT ELIMINATION" of the Electric Peak.
• CONSUMER'S should have ENERGY CHOICES.
• Currently and as proposed by the electric industry, in the FUTURE,
• The CONSUMER WILL NOT HAVE AN ENERGY CHOICE.

I have solar panels and a big bill for electricity. I use the minimum amount and am on an offpeak/onpeak program. I have heard so much about the programs for billing when you are on solar and still don't get it. This talk about smart meters is very disturbing and I vote for net metering and keeping things as they are. APS is the only company I can connect with and it worries me that they want my electricity I generate and more money too. Solar is clean, leaves no carbon imprint, and was put in for environmental issues. Putting more restrictions and costs on customers will injure the new industry. APS doesn't see the long range potential for solar, just their need to fuel their own failing solar project. APS needs to listen to the people that are fighting for alternative energies and make solar more attainable not less. I do not want a smart meter that will turn me off when they need more electricity. I had one of those in Pennsylvania and I had more brown outs and power outages than most people have in a life time. Solar isn't an option, it's a necessity. I don't want my bills to go up, I want them to go down. I am retired and need my bills to stay low so that I can afford a comfortable life. APS makes enough money from me to power my house and then some.

APS is so dishonest in their filings.. their proposed "20 year grandfathering" would not cover new owners of your house & solar panels. So if you sold your house, to the new owners it would only be worth only 1/2 of what it currently is worth to you due to extra fees/reduced electrical credit. The new owners would not be grandfathered in at all!!
PLUS.. July 2013, APS just reduced the credit by 50% if you overproduce! They will NEVER pay you more than 0.03 cents cash per kWH!! All the time they are selling your excess to your neighbors at 0.24 to 0.49 cents per KWH for peak and superpeak rates!!! I produce 90% of my yearly power and still have $100 power bills from all the fees!